Downsizing to a smaller, simpler home can be challenging. This is especially true in the living room, where our TVs have grown, movie libraries expanded, and media devices multiplied. Instead of trying to cram everything into your new space, consider these solutions for simplifying your setup.
Media & Gaming - One Box to Rule Them All
A 5.1 surround sound system, DVD/Blu-ray player, receiver, Xbox, Wii, and PS3 are space hungry enough. Add all the associated remotes, cables, controllers, discs, and accessories, not to mention the required furniture, and you may have already occupied more than half of your new living room.
An Apple TV can stream, rent, and buy television, movie, and music content from Netflix and iTunes, stream video from your iPad, iPhone, or iPod touch, and even turn your TV into a screen for wireless gaming with these devices. With the massive library of games available on the App Store, simplicity of rentals on iTunes, and ever-expanding Netflix Watch Instantly catalog, this diminutive box can replace not only your DVD/Blu-ray player and your game consoles, but your bookshelf full of movie and game discs as well. An alternative to Apple TV is Roku, an excellent streaming box that supports even more content sources, including Hulu Plus, Amazon Instant Video, Pandora, and Rdio.

Smart TV - Not So Smart
If you're in the market for a new TV, you may be tempted to simplify further by going for one with video services built-in, but I recommend focusing on slim build and screen quality instead. The user interfaces in these "smart" TVs are often not only complex and sluggish, but in many cases poorly maintained by the manufacturer. LG and Samsung deserve praise for their hardware quality and design, not their software experiences. A slim, beautiful screen paired with an inexpensive, elegant media box like Apple TV or Roku is the way to go, despite the extra peripheral.
Simple Sound
To replace your speaker system and receiver and avoid complex, unattractive wiring, consider a sound bar and wireless subwoofer. We've written about these simple, low cost sound solutions in the past (see some of our favorites here and here). While not as robust as full sound systems, many of them provide surprisingly rich sound, and you can't beat their size and simplicity.
The best part about these solutions is that they can be easily paid for by reselling your old gear. Host a yard sale, trade in your media to Amazon, sell your electronics to Gazelle, or assemble an epic Craigslist post, then use the earnings to buy your new, simpler setup!

Nomade Express Slee...
My husband and I started this process (and it IS a process, not a purchase) nearly two years ago. We ripped our entire DVD library (nearly 300 titles at about 30-60 minute processing time -- each) onto our Apple Time Machine and use his desktop comp as an iTunes gateway for the AppleTV, then started the slow process of selling/trading/donating our movies away. We still have about 30 sitting in a box.
We also canceled our TV service and switched to Hulu and other streaming options, unpaid versions. The Apple TV can handle this, but not without being hacked to run XBox Media Center. We save around $80/month without our dish subscription, and now I cannot IMAGINE going back!
Now we're down to a TV, Apple TV, audio box and PS3 (not counting the computers and time machine as they are separate both physically and functionally), but still have the furniture to fit an additional two box units and DVD collection. Downsizing that mess will come next.
Like I said, it's definitely a process...
KRMO, i did the same thing once I received two Powermacs at work, I set it up so it as pretty quick.
I suggest using the identify application to correctly tad all of your dvd media. If you want the process to go a bit faster, find someone who already converted the same movies that you need to and offer a trade, just don't steal.
We find that Roku is superior to Apple TV in just about every way.
Love the Apple TV, but It's too limited for me.
I have a similar setup, but I use my PS3 as a media hub. I have Hulu+ and Netflix both streaming to the PS3 and then 2x 2TB harddrives with TV and Movies hooked up to a Pogoplug that also streams to the PS3. Using the Pogoplug allows me to also access these files when I'm out of town. To record TV I stuck a TV tuner in an old PC from my undergrad days and hooked it up to my TV. Eventually I'll probably build a custom HTPC that can do all of those things and sell the PS3. It works pretty well for now.
"We ripped our entire DVD library...then started the slow process of selling/trading/donating our movies away."
KRMO, you know that's illegal, right?
Jail broken Apple TV is awesome.
If the Apple TV or Roku could play Blu-Rays, this might be possible. For now, it's a no-go. Streaming isn't quite viable until we look at faster internet connections. Right now we get 3m/512k broadband for $40/mo, which isn't quite fast enough to handle HD streams on top of our normal usage reliably. Form over function just isn't ready for prime time in the living room.
Right now we use a PS3 to handle most media and a Tivo to handle DVR duty (lifetime subscription- so no monthly fee). It works well, and while I'd like to consolidate, I won't until I don't have to work harder to make things work. Apple's current product line doesn't quite make it as easy as I want it to be.
@krmo: Ripping DVDs is a great idea - but I think it is questionable ripping them and then selling. I would rip the DVDs and then keep them hidden away in a closet or storage room.
I love my Samsung Smart TV. No need for a box as all the apps are available on the tv itself. One less piece of hardware too!
I don't think it's illegal to rip your dvd's for personal use, is it? Like cd's you can import on your computer & ipod?
I want to get rid of Comcast, and get Roku, or use an old computer with Plex, but the hubs is not so keen... Hulu plus, $7.99 / month, other internet provider $35 for wayyyyy faster speeds – Comcast is $80/month. And sucks so bad.
It's amazing how many people think that you can rip dvds or cds and then sell the originals.
@lillik. It is illegal to rip then sell. Ripping is only supposed to be a backup for media that you personally own. So if you own the DVD, you can rip a copy as a backup. But if you sell the original, then your ripped copy is no longer a backup, it is a unique copy. The reality is that as long as you aren't distributing your copies to people online by selling or for free, probably no one is going to find out about it. But it is technically not legal.